Towards a Green Economy: Evidence from Countries, Türkiye’s Regions and Turkish Firms

Abstract

Addressing the climate challenge is vital for the long-term sustainability of the World as a whole where transition to a sustainable and green economy has become an important goal. In transition to a sustainable economy, increasing the ability of countries to produce green products is crucial to cope with the climate crisis. Within this context, various studies have been conducted in the literature to gauge the level of green production capabilites of countries. Recently, a related novel measure of green complexity has been developed by Mealy and Teytelboym (2022) based upon the economic complexity methodology of Hidalgo and Hausmann (2009). This study relies on this new concept of green complexity and provides a holistic approach to the related literature by employing a cross-country analysis as well as a regional and firm level perspective for Türkiye. To this aim, this thesis is mainly constituted by three individual essays complementing each other. In the first empirical essay, the relationship between the green complexity and carbon emissions is explored through a country panel. In the second essay, green complexity indices are calculated at NUTS-3 level for Türkiye where the capabilities of these regions in terms of producing green products are identified and the relationship between their green complexity level and some air pollution indicators is explored. Last but not least, in the third essay, firm level green complexity indices are computed and the relationship between environmental expenditures and financial performance of Turkish firms is examined considering their green complexity level as well as the technology intensity of their exports.